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SECTION 20 EXPLAINED I recently took over as secretary - not company secretary - of a residents management company of a block of 14 flats in Swanage, Dorset. It was a case of Hobson’s Choice as no one else wanted to stand but I have no experience in this field whatsoever. On reading Issue 5 of Flat Living, my director asked if I could find out further information on Section 20 as mentioned on page 11 of the magazine. I have tried to check the Companies Act but it does not seem to be the right clause. I should be grateful for any assistance you are able to offer and I was wondering whether there is any sort of “Dummy’s Guide” for management companies such as ours.
Sandy Headey FLAT LIVING REPLIES:
Section 20 is the consultation process for works which: • Will cost any one leaseholder more than £250. This includes repairs, maintenance and improvements to your building and estate.
• Enter into a long-term agreement (for more than 12 months) with outside contractors for work, supplies or services which will cost any one leaseholder more than £100 a year. Examples include cleaning, grounds maintenance and surveying.
• Carry out work under a long- term agreement where the work will cost any one leaseholder more than £250.
The Section 20 consultation process generally has three stages: • A notice of intention - what you are planning to do.
• Notification of estimates - prices that you have obtained.
• Notification of award of contract - who has been chosen.
If you have a question, or would like to share with other readers your ideas or experiences of living in a leasehold block, we want to hear from you. Address your comments or queries to the flat living team at
info@flat-living.co.uk
www.flat-living.co.uk 19
FIRE RISK ASSESSMENTS EXPLAINED I am in the process of commissioning a fire risk assessment. What will I get for my money and how much should I expect to pay? Name and address withheld
JOHN JOHNSON OF ELJAY RISK MANAGEMENT LTD REPLIES:
You should expect the person carrying out the assessment to look at all of the fire safety features, such as emergency lighting, escape routes etc. and, importantly, to look at any fire hazards that may be prevalent. The check should include bin areas, cellars and other potentially hazardous areas.
Any log books on site should be made available for inspection as well, so that the upkeep of the fire detection and alarm systems, if fitted, can be assessed. A written fire risk assessment report should be provided and signed by the assessor, with an action plan and any remedial measures
recommended.The assessor should also be prepared to provide further advice to the managing agent upon request. As a guide, for a fire risk assessment of the common areas of a block of 15 dwellings with two staircases, garden and basement, including a written report we would charge around £110 plus VAT. The fees do tend to increase depending upon the size and complexity of the property. This is because time spent on site is a factor in putting together quotes for assessment work.
More advice can be located on the Leasehold Advisory Service website at
www.lease-advice.org or via the RICS Service Charge Residential Management Code which is available at
www.flat-living.co.uk/information/ category/service-charge- residential-management-code
DEEDS OF VARIATION I am a director of a not-for- profit company, which owns the freehold of a block of 27
flats. The company manages the property on behalf of the lessees, each of whom owns one share in the company. Our property was built in 1967, the leases of each of the flats having commenced in 1967 and with a life of 120 years. Our leases therefore have 77 years of unexpired life. We are planning to extend our leases by means of a Deed of Variation. We already have a Deed of Variation which will be
superseded by the new deed which will include the clauses of the existing deed. Each flat owner has his or
her own garage. The garages have their own separate leases. One concern is that flat owners could assign their garage leases to a one party and assign their flat leases to another party. This would be a retrograde step. We would be faced with more people and vehicles visiting the property and inevitably the garages would fall into disrepair. How can we ensure that each flat and its associated garage is only assigned to one common owner? Could this be enforced by one new Deed of Variation which also extends the leases of the flats and associated garages? It would certainly reduce the paperwork burden if we could carry out the operation with just one all encompassing deed of variation. Name and address withheld
KATIE COHEN, PARTNER AT JPC LAW REPLIES:
It may be possible for the garage lease and flat lease to be amalgamated so that one lease is put in place and therefore there is one common owner for both the flat and associated garage. This would overcome the problem of separate ownership.
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